Current Gasoline Prices Expected to Shed 50 Cents in the Coming Weeks

Gasoline prices are expected to quickly fall in autumn.

With increasing inventories and decreasing demand, per gallon current gasoline prices may have a sharp 50-cent fall from its highest average this month of $3.86 per gallon. The drop, which is expected to happen in the coming few weeks, may boost the economy and potentially become a factor in the presidential elections next month.

The current gasoline price average of $3.69 per gallon is anticipated to drop to $3.35 or even below that in the latter parts of November. The rates have already fallen lower than $3 per gallon in certain isolated locations.

The majority of the nation’s gasoline prices today are moving significantly lower in the coming weeks, according to chief oil analyst Tom Kloza. He also notes that wholesale costs in several main markets have declined from a high of $4.35 to only $2.71 per gallon. Prices at the pump usually lag huge drops in wholesale costs. However, per gallon retail prices of gas are anticipated to shed around five to fifteen cents every week over the coming three weeks.

The fall may increase consumer spending and influence the upcoming presidential elections where the high gasoline prices have been a hot issue for most of the campaign. Some battleground states, including Pennsylvania, Ohio and Wisconsin are enjoying huge drops in their gasoline prices today.

Lower prices at the pump are certainly helpful in consumer spending as it increases disposable income, according to chief economist Brian Bethune of the Alpha Economic Foresights. Moreover, a rapid drop in prices over the coming three weeks would most likely be helpful to the current president. It may seem illogical but, if people face issues with high prices of gasoline or food, the president is the one who usually gets blamed.

Gas prices have been stubbornly higher than their usual peak during a Memorial Day weekend, mostly because of inventory shortages and refinery problems in the Midwest and the West Coast. However, with the increase in oil inventories and production problems being resolved, prices have been getting better in the previous week, a trend that will possibly go on.

Current gasoline prices are therefore expected to fall to around the $3.30 level. Analysts expect a low of $3.35 per gallon as the nationwide average through the coming year. Without considering tensions in the Middle East or unexpected refinery problems in the United States, prices may stay at that level until the early parts of the coming year.

Last week, several stations in central Ohio saw gasoline prices at $2.97 per gallon.

California still holds the top spot as the state with the highest gasoline price average, at $4.51 per gallon, even if several stations still charge as much as $5 per gallon. Energy experts anticipate California’s high gasoline prices today to fall within the $4 level. The state is still not completely free from supply and refinery problems.

By: Chris Termeer

Chris Termeer

Chris Termeer is an oil and gas consultant, industry commentator and analyst. His book, Fundamentals of Investing in Oil and Gas provides a comprehensive overview of all aspects of the oil and gas industry, including exploration, drilling, production, storage, transportation and refining, to name but a few.

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